Monday, August 17, 2009

51) Managing Money

"Use money with clarity, focus, ease and grace." Maria Nemeth

I grew up in Quilon, a small town in Kerala, South India. Nothing much happened there. If someone bought a new car, one week's gossip was ensured. One morning the town awoke to a buzz. An old woman, who lived in a small hut, was found dead. She was a familiar figure in town, always smiling and petitioning compassionate people for alms. She was never seen without a scarf covering her head, tied tight at her chin. We imagined that she was trying to conceal her thinning hair. As her neighbours prepared her body for the funeral, they untied the scarf. Surprise! Out fell high denomination currency. The money, enough to have given her a comfortable life in 1953, was donated to charity. With so much money on her person(obviously, she did not trust banks), why did she have to beg? Was it plain greed, money-craze or an obsession with crisp bills? I do not know. What I do know is that the happening is not erased from my memory.

Saint Paul was right when he wrote: "For the love of money is the root of all kinds of evil" 1 Timothy 6:10. It is not money, but the excessive love of it that leads to evil. The old woman,apparently out of love for money, duped people into helping her,
time and again, when she needed no alms at all. The duplicity of Ramalinga Raju of Satyam Computers, is a case in point. For years he cooked his books to reflect higher profits and assets, to gain from higher share prices. Today in prison he has the time to reflect on his actions. Will he be a chastened man when he finishes his prison term?

As parents we have to teach our children to manage money prudently. To earn it honestly and spend it wisely. Even when in school, they could be initiated into saving habits - collecting incentives and bonuses given to them for good performances. From the pocket money given to them, small sums could be put away. (Some tactful supervision, without interference, is necessary over how children spend their pocket money.) From their small savings, encourage them to give their mite to worthy causes. It is absolutely exhilarating to witness children make
sacrifices. When they come of age, we could induct them into concepts of Profit and Loss, Credit and Financial Investments, to get them ready for financial decisions they will have to make when they start their careers. Saving for retirement does not start at 40, but at 22/23. Starting early not only strengthens the saving habit, but also leaves them with a larger sum of money, when the saving scheme matures.

I remember a story on thrift told to me, when I was in school. The Bishop of Quilon
had some projects to complete(schools, orphanages,hospitals), for which he needed funds. A well-wisher referred him to a Philanthropist in the USA. The Bishop arrived a few minutes before the scheduled appointment with his benefactor. As he sat in the parlour, he heard the man descend the stairway. He stopped abruptly and scolded his house keeper for wasting a second match to light a candle. The Bishop was puzzled.
How could a man who owned a chain of factories making match boxes, be harsh with his house keeper for lighting a second match? At a cordial meeting that followed, the rich man gave the Bishop a hefty donation. The Bishop could not leave without a clarification: would he please explain his behaviour with the house keeper? Amused,
but willing to explain, he said that he started life as a small trader. Because he was careful with the cents he ended up with dollars from which he could donate to good causes. The Bishop left the rich man's house a wiser man.

While making money, for good purposes, is laudable, children should not be carried away with the large sums they accumulate. Stuart Goldsmith, author of Seven Secrets
of Millionaires, has a strong point to make: "If you ever made any real money, you will be so caught up in your resounding success, that you will find it very difficult
to quit. Knowing when is enough is the most difficult challenge you will ever face".
Wealth is like sea water; the more one drinks, the more thirsty one becomes.

As parents we are always anxious to give our children what we did not have, what we missed out, so much so, we neglect to give them what we have - a sense of balance.
Perhaps Daniel Webster's words will support us in this task: "If you want to feel rich, just count up all the things you have that money cannot buy". When they reflect on Webster's words, they should find the resolve to strike a balance between what money can do and cannot.

While on the subject of managing money, I am tempted to touch on a popular belief:
the lucky ones make money, the unlucky ones stay poor. Let an illustration dispel the myth. A farmer in ancient China owned a horse which he used for ploughing the field and transporting the produce. The villagers referred to him as the lucky one, because only he in the village owned a horse. One day the horse escaped into the hills. Now the villagers called him the unlucky one, because the horse was lost. A few days later the horse returned with a herd of wild horses. With so many horses in his stable, what else could be but the very lucky one. The next day the farmer's son tried mounting one of the wild horses. He was thrown off; falling down he broke his leg. This time the villagers agreed that the farmer was a very unlucky man. The next week officers from the King's army visited the village to conscript young men for the army. Only the farmer's son was excluded because of his broken leg. Now the villagers were certain that the farmer was a hugely lucky man, because his son had escaped conscription. Each time the villagers praised his luck or sympathized with him for his bad luck, the farmer had the same answer: "Good luck? Bad luck? Who knows?" The farmer was right: 'who knows?' Only those who win a lottery are lucky in making money the easy way. Others have to work for it. Even those who find treasure in their back yards have to dig for it. That is why someone alluded to luck as the residue of hard work. For our part, we should protect our children from ill-fated ideas, lest they be felled by their spell.

All said and done, money is not bad; it can support worthy causes. The important thing, is the purpose to which money is put. On this, Dan Sullivan and Catherine Noruma have a point to make: "Always make your purpose greater than your money". When the purpose is beyond reproach, then the money is managed with 'focus, ease and grace'.

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